Builders are still lowering base prices and/or offering bigger incentives than before though the number of available lots is decreasing. With most fiscal years ending soon, builders are trying to move remaining inventory and start fresh in January 2007.
Lower market inventory in the existing and new contruction home market are signs to builders that prices may be stabilizing and the market is becoming balanced. Many builders are finishing up "phases" of their communities and may be raising base prices or taking away many incentives beginning in 2007.
Average delivery times have dropped from 9 months to 6 months. This can mostly be attributed to less backlog due to lower sales volume and good overall weather conditions.
Builders are now offering up to $20K in incentives for full deposits within 7 to 14 days of a "lot hold" in an attempt to have more money upfront and make it financially harder for a purchaser to cancel a contract. Some builders have completely gone away with "lot holds" and require full Purchase Agreements accompanied by Earnest Money Deposits of up to $90K. This may be an attempt by builders to combat the rising number of cancellations and buyer remorse.
